pasadena bankruptcy attorney

Bankruptcy is considered a lawful way to clear your debts and start over with a clean slate. It gives hope to bankrupt individuals who are struggling with debt and financial obligations. It gives you a chance to achieve a debt-free life and have a fresh start. Filing bankruptcy will allow you to reorganize your finances, pay off a creditor, and pursue debt settlement.

Among the different types of bankruptcy, Chapter 7 is considered the most common chapter. It’s the simplest and quickest type of bankruptcy.  Since bankruptcy laws vary from state to state, a credible Pasadena bankruptcy attorney can help you understand these laws depending on the jurisdiction. Before you choose the chapter that you will file, it is important to know if you can meet the income requirements and if you can protect your assets using bankruptcy exemptions.

In the first place, you choose to file for bankruptcy because you don’t have enough money to pay off your debts. On the contrary, the bankruptcy filing might require you to pay bankruptcy filing fees. If you have no asset or money to pay for it, you can file for a no-asset bankruptcy.  This article will explain how a “No Asset” Chapter 7 bankruptcy works. Here are some of the questions that you might have in mind when you file a Chapter 7 bankruptcy with no money:

  1. What Is a Chapter 7 “No Asset” Bankruptcy Case?
  2. How Do You File a No-Asset Bankruptcy Case?
  3. How Can I File Bankruptcy at Low or No Cost?
  4. How to Determine If You Have a No-Asset Chapter 7 Case?
  5. When Will a Trustee Abandon Property?

What Is a Chapter 7 “No Asset” Bankruptcy Case?

Chapter 7 bankruptcy can wipe out certain debts within a few months, but a court-appointed bankruptcy trustee can sell your non-exempt property to pay your creditors. In addition, you must have a low income to qualify. When you surrender your property in Chapter 7, the case is an asset case. In contrast, if you can keep your assets and property, it is called a no-asset bankruptcy case. In a no-asset case, you don’t lose any property and your creditors get nothing.

Most Chapter 7 bankruptcies are considered no-asset cases, meaning all of the debtor’s property is either exempt, the assets that are not exempt do not have monetary value, or there’s a valid lien against the property. You can still liquidate assets in Chapter 7 bankruptcy even if you don’t have a lot of assets or property. Your bankruptcy trustee will have to declare a no-asset bankruptcy and those creditors cannot make claims on your property or assets to pay your debts.


How Do You File a No-Asset Bankruptcy Case?

The procedures of filing Chapter 7 are similar in both an asset or no-asset case. You can seek legal assistance from a reliable Pasadena bankruptcy attorney to help you throughout the bankruptcy process. Here are the steps:

  • Choose the best bankruptcy chapter for you
  • Prepare all necessary financial documents
  • Take a credit counseling course
  • Fill out the official bankruptcy forms and file a complete paperwork
  • Attend the 341 creditor’s meeting
  • File a debtor’s education course certificate
  • Receive your debt discharge


How Can I File Bankruptcy at Low or No Cost?

Declaring bankruptcy doesn’t have to be expensive. Here are the two out-of-pocket costs related to bankruptcy filing:


Lawyer’s Fee

You can avoid the lawyer’s fee by either filing your bankruptcy or finding a lawyer who can provide no-cost legal services. If your priority is to save money, you can choose to file your bankruptcy case by yourself. You can file your bankruptcy petition on your own, however, it can be a risky approach. Very few bankruptcies are successful with pro se litigants. It’s easy to make a mistake with bankruptcy paperwork, which will cause the court to dismiss the case.


Court Filing Fees 

Bankruptcy courts provide options to people who cannot afford filing fees. You can avoid the fees by asking the bankruptcy court for a fee waiver. For instance, if your income is below a certain amount, the court may waive your filing fee. If your income does not qualify for a fee waiver, the court may allow you to pay your fee in installments instead of paying in a lump sum.


How to Determine If You Have a No-Asset Chapter 7 Case?

Since Chapter 7 is a liquidation bankruptcy, you have to surrender some of your property and use them to pay off creditors. Bankruptcy law allows debtors to keep a certain amount of property after going through bankruptcy proceedings. This is called the “exempt” property, which includes your assets that are necessary for living and working. In every state, there are bankruptcy exemption laws that can protect your assets and properties from liquidation. Some exemptions apply to a specific type of asset, such as a vehicle or a home. Other exemptions are known as “wildcard exemptions” and can be applied to any type of personal property that has a certain value.

On the other hand, a property that cannot be exempted is called a “non-exempt” property. It generally covers items that fall outside of the necessities. If you choose to file Chapter 7, your bankruptcy trustee will be in charge of selling your non-exempt property. The proceeds will be distributed to your creditors according to the bankruptcy payment rules.

If your bankruptcy case does not belong to any of these bankruptcy exemptions, then it is considered a no-asset Chapter 7 bankruptcy case.


When Will a Trustee Abandon a Property?

If the trustee abandons a property, you keep the property even though it is nonexempt. When the bankruptcy trustee determines that assets in your bankruptcy estate do not have a value that would benefit unsecured creditors, the bankruptcy law allows the trustee to “abandon” the property. The trustee may also abandon the property to the lienholder if the lien is greater than the value of the property. In most instances, when the trustee abandons the property, the property goes back to you.


The Role of a Bankruptcy Attorney

Your case will be a no-asset bankruptcy case if you can protect all of your property with bankruptcy exemptions so that the bankruptcy trustee can’t sell anything you own. To determine if your bankruptcy will be a no-asset case, you must know how much your property is worth and what exemptions are available to you. Our experienced Pasadena bankruptcy attorneys at Pasadena Bankruptcy Law (Daniela Romero Law) can help you learn how to make your bankruptcy affordable. Contact our bankruptcy law firm and talk to an expert in dealing with no-asset bankruptcy cases.